Public Bill Committee

[Robert Key in the Chair]

Clause 21

Local child poverty needs assessment

Amendment moved (this day): 7, in clause 21, page 12, line 26, after assessment, insert
including an assessment of
(i) job creation, and
(ii) family resilience.(Andrew Selous.)

Robert Key: I remind the Committee that with this we are considering amendment 72, in clause 21, page 12, line 26, at end insert
including the levels of benefit and tax credit take up among the eligible populations.

Andrew Selous: Good afternoon, Mr. Key. May I be the first to welcome you to the last sitting on the last day of our deliberations on this very important Bill? It is good to have you back with us.
Before lunch, I had been speaking to the first part of amendment 7 about the central importance of job creation being at the heart of local authorities quest to eradicate child poverty in their area, and I now want to move on to the second part of the amendment, which deals with family resilience.
You will be relieved to hear, Mr. Key, that I do not intend to go over the ground that I covered when we discussed family matters on a prior amendment, but I would like to add a bit of new material to support why I think that proposed new sub-paragraph (ii) in amendment 7 could usefully come into clause 21. I shall start, if I may, by quoting from a document that I have been sent by Relate, which I believe may be one of the organisations to which the Financial Secretary referred when he said that the Government give
£7 million to third-sector organisations that work with such families.[Official Report, Child Poverty Public Bill Committee, 29 October 2009; c. 242.]
I have a strong suspicion that Relate may be one of them.
Relate states, perhaps unsurprisingly from its point of view:
Relationship breakdown is a key cause of child poverty. Local Authorities cannot tackle child poverty without tackling relationship breakdown.
It goes on to make several points on the same theme. It states:
Preventing relationship breakdown wherever possible, and facilitating responsible post-separation parenting increases the likelihood that households will have at least one salary coming in,
and, as we have said many times in this Committee, work is the best route out of poverty, so it is obviously important. Relate also discusses the
large number of non-resident parents contributing neither income nor care
as far as their children are concerned.
When we talk about relationships, it is important to remember that post-separation, relationships can be better or worse for the children. If they are better, they can have a positive impact on income and dealing with child poverty. Relate goes on to make several suggestions about where work on that area could be done. It talks about childrens centres, work with primary care trusts and referrals from general practitioners.
The hon. Member for Northavon was correct when he said in our discussions last week that he believed that I was involved with such organisations in my constituency. In fact, last Thursday evening, I went from our second sitting to meet the director of childrens services for my local authority, so that I could introduce her to a voluntary group in my constituency that is hoping to work in that area with the local authority.
I have done some research on the background of the Ministers, and I believe that I am right in saying that the Under-Secretary of State for Work and Pensions, the hon. Member for Bishop Auckland, worked for the Childrens Society in a prior life. I am sure that she has avidly read the excellent publication, A Good Childhood, which was brought out by the society. She will have noted, as I have, at the top of page 22, the fact that children rate more highly than their parents do the importance of good relationships in a family and trying to avoid family breakdown. We know that, from a childs perspective, that is incredibly important.
The last organisation that I would like to pray in aid when talking about the second part of amendment 7 is an excellent one: the Bristol Community Family Trust, which is not far from the constituency of the hon. Member for Northavon. It manages to reach one in three new mothers in Bristolwell over 900 mothers a yearand mothers and fathers, with its relationship course, Lets Stick Together. All that is done in a non-stigmatising, non-moralising way. It is not about hitting anyone over the head; it is not about telling people that they do not have perfect lifestyles or relationships. As I said last week, it is all about giving people the skills and support to make a success of their lives. I agree with Relate that it can have a critical impact on child poverty.
The other amendment in the groupnot in my name but that of the hon. Member for Regents Park and Kensington, Northis amendment 72, which adds to the clause consideration of
the levels of benefit and tax credit take up among the eligible populations.
That is an important point. The facts show that if every benefit and tax credit to which families of children living in poverty are entitled were taken up, at a stroke 400,000 would be taken out of poverty; that is a significant figure. That would obviously help the Government and all of us to move a long way towards reaching the child poverty targets. The hon. Lady is on to something. The Government run take-up campaigns across the benefit system for all groups, and they would clearly have a significant impact on the issue that we are considering. For that reason, I generally support the hon. Ladys amendment.

Steve Webb: Good afternoon, Mr. Key. I would like to say a brief word about amendment 72 and then come back to amendment 7. Amendment 72 highlights the importance of take-up. It is vital that where the state has identified a level of income to which families with children are entitled, they receive that entitlement. The key method of supporting low-income families with childrenthose with whom we are most concerned in the Billis the child tax credit, so I was surprised to see in the households below average income statistics the figures for families with children and their receipt of child tax credits. Table 4.4 shows that of all 12.8 million children in the country, only 60 per cent. are in families receiving child tax credit. That suggests that take-up might be a significant issue. While it is true that child tax credit does not apply to the entire income scaleit cuts off at about £58,000that fact knocks out only about the richest 10 per cent. or so of families with dependent children.

Helen Goodman: I am sorry to intervene, but could the hon. Gentleman say that again, please?

Steve Webb: The whole thing? I was quoting a figure from table 4.4 of the households below average income report, page 65. It categorises children according to the benefits that their parents receive. It says that of the 12.8 million children in Britain, 60 per cent. are in families receiving child tax credit. I would assume that if every entitled family received the tax credit, the figure would be about 90 per cent. We know that there is a slight lack of take-up by case load in particular, which one might have thought would result in a figure of 80, 78, or 75 per cent., or whatever. I was startled when I looked at the figures to see 60 per cent., because that implies that around a third of families who are entitled to child tax credit are not getting it. That is a higher number than I have seen before. I am starting with this point to give the Minister time to reflect on it. Why are up to a third of those entitled to child tax credit not getting it? Amendment 72 flags up the importance of take-up and, if I understand that figure correctly, there is an important gap in the system.
To come back to amendment 7 and what should be included in the regulations on the local child poverty needs assessment, my feeling on the point about job creation is that it is almost impossible to imagine a local child poverty needs assessment that did not take account of the need for jobs. It is inconceivable that one could have such an assessment and strategy that did not take jobs into account, so sub-paragraph (i) of amendment 7 is perhaps unnecessary.
I want to say a word, however, about family resilience. In our earlier debates, the hon. Member for South-West Bedfordshire would perhaps have felt that those of us on the Committee who took a different perspective from him were simply refusing to accept something that was blindingly obvious and which was staring us in the face. Given that he might anticipate being on the other side of the Committee as a Minister in the Department for Work and Pensions in six months time, it is worth probing his reasoning a little further.
The hon. Gentleman rightly pointed out that children of lone parents are twice as likelythat is how it looks from the figures, but they are certainly significantly more likelyto be in poverty than children in two-parent families. From that, he infers the need for amendment 7, which would include family resilience in the Bill, but I want to give him one example of why we might reach the wrong policy conclusion if we approach the issue in that way.
Let us suppose that young women with low educational attainment and low aspirations are more likely to have children young and outside a stable couple relationship, which means that they are then more likely to become lone parents and to be in poverty. They are likely to be in poverty partly because their low educational attainment will mean that any job that they get might not be very good and might be low paid, and if they have young children, they will, of course, be in poverty anyway. The problem, as it were, is the low educational attainment, not lone parenthood per se, although that clearly makes life more difficult. The policy response to such young women is not couple therapy or Relate, but education, although perhaps the response would involve parenting classes for those womens parents and all sorts of other things.
That is just one example, and I will not labour the point, because we need to make progress. What I am trying to say to the hon. GentlemanI want to call him my hon. Friend because I think that he is sincere in what he is sayingis that just because someone in one group is more likely to be poor than someone in another group, we should not think that the title of that group tells us everything that we need to know about them. Clearly, we want to keep stable couples and parents together and we want to help people make healthy relationships, but if our goal is to tackle child poverty, we have to see the big picturewhy do people become lone parents?
The other thing that we need to remember is that lone parenthood is not principally about married couples splitting up, because most lone parents have never been married. We have a whole set of policy responses for young women who are lone parents and who have never been married, and we have a set of responses for divorced people, people who have had casual relationships and ex-cohabitees. Lone parenthood is linked with poverty, but talking just about family resilience makes it sound as though family resilience is the key to unlocking everything. However, lone parenthood has diverse causes, and there are diverse policy responses. Supporting couple relationships is a good thing to do, but it is perhaps a smaller part of the overall picture than the hon. Gentlemans simple statistical correlation might lead him to conclude. That is all that I want to communicate.
Both the issues in the amendment are important, but I am not sure that they need spelling out in the Bill. I would, however, be interested to hear about take-up, because the shortfall on child tax credit is apparently rather large, so it should be a focus for action by local authorities.

Helen Goodman: May I begin by saying what a pleasure it is to serve under your chairmanship this afternoon, Mr. Key?
I want to begin this mini-debate on amendments 7 and 72 by saying something about the importance of job creation. To be honest, I find it totally astonishing to be on the receiving end of the implied criticism that the Government have not paid sufficient attention to job creation in their range of policies. Job creation does not appear as one of the factors in the clause because the provisions are about how, not what.
I draw the attention of the hon. Member for South-West Bedfordshire to the vast amount of work being done on job creation. First, for example, we have the working neighbourhoods fund, which was introduced in April 2008 and which consists of a £1.5 billion three-year settlement. It is distributed to the 61 local authorities with the worst concentrations of worklessness, but the Conservative party opposes it.
Then, there is the new future jobs fund, which is worth £1 billion. It aims to create 150,000 new jobs. Again, the Conservative party opposes it. Then, there are apprenticeships. We have provided an £11 million package to create 3,000 new apprenticeship opportunities. Again, the Conservative party opposes it. The Conservative party has opposed the flexible new deal, local employment partnerships, which are helping 250,000 people into work, and routes to work, which will help 50,000 long-term unemployed young people to access existing jobs.

Graham Stuart: I do not want to pre-empt anything that anyone else might say, but I wonder whether the Minister might get back to the amendment.

Helen Goodman: Earlier, we discussed whether we should have a specific reference to regional development agencies in the Bill. Both Opposition parties say that they want to close down the RDAs, which have been an absolute engine of job creation in the regions. David Blanchflower, the former member of the Monetary Policy Committee, said that the unemployment rate would be 5 million higher if the Conservative partys plans were implemented. Opposition Members really need to start thinking about these issues in a clearer and more constructive manner.
Amendments 7 and 72 relate to clause 21, which sets out the requirement for local authorities and their partners to prepare and publish a needs assessment. That forms the basis of the joint local child poverty strategy, which must be published under clause 22. Clause 21(2) and (3) give the Secretary of State the power to make regulations that may prescribe the contents of the needs assessment.
In amendment 7, hon. Members suggest that the regulations made under clause 21 should require local authorities and their partners to consider job creation and family resilience. We heard from witnesses on 20 October about the important work that local authorities and their partners can carry out to tackle child poverty. It is clear that supporting and improving outcomes for families and working with local employers on the availability of jobs in their areas and the removal of barriers to parental employment are important elements of effective local child poverty strategy.
Although those elements have a vital role, we also heard that we must not set our partners in local government an impossible task. For the purposes of the needs assessment, we must ensure that we do not impose undue burdens by asking local authorities and their partners to measure issues on which they do not have access to data and which they cannot measure. The issues as framed and as highlighted by the hon. Member for South-West Bedfordshire are complex, and local authorities will not be in a position to measure them directly.
I turn now to the hon. Gentlemans remarks on family resilience. I am glad that he has read the report from the Childrens Society, but I hope that he read in the appendix the acknowledgment to the person whose idea it was to set up the inquiry into the condition of childhood. The point about that excellent piece of work by the society is that it looks at things from the childs perspective and offers a complete picture of child well-being, while the Bill is about child poverty, and they are not the same issue.
Let me return, however, to the issue of parenting and resilience. In 2007, a report on parenting and resilience commissioned by the Joseph Rowntree Foundation described family resilience as a complex concept that refers to a familys ability to manage in difficult circumstances and to achieve outcomes that are better than anticipated given the pressures that the family face. The report indicates that resilience is difficult to measure and that approaches vary to child resilience, parental resilience and family resilience. It is not clear how a local authority or its partners would measure the concept as set out in the amendment.
Again, the hon. Gentleman takes an issueon this occasion, family resilienceasserts that it is important and says that it should therefore be in the Bill. The remarks made by the hon. Member for Northavon on that matter were eminently sensible. The problem that lone parents face is worklessness. The hon. Gentleman might know that there is a 55 per cent. chance that a child in a lone parent family is living in poverty, if their parent is out of work. For a child living with a workless couple, the chance increases to 68 per cent. I wish to draw the hon. Gentlemans attention to the fact that it might not be the familys status but the other things going on in that familys life that are significant.
If something is not in the Bill, that does not mean that it is not important, nor that the Government are not paying attention to it. The Department for Children, Schools and Families has a number of programmes that support families in which there has been family breakdown. It has £5 million for pilots dealing with support for separated parents. Over the next two years, we are providing £7 million strategic funding to a number of third sector organisations that work directly with families experiencing relationship conflict, and we have provided £3 million to third sector organisations such as Relate. We have just announced an increase in the number of family intervention projects. All those things are going on outside the context of the Bill, and I therefore urge the hon. Member for South-West Bedfordshire not to confuse something that is important with something that needs to be in the Bill. Another institution that we have established, and which provides support to families, is Sure Start. The Conservative party, of course, is not committed to maintaining the level of funding for Sure Start either.
I shall return to the draft regulations, which we have made available to the Committee. They state that, alongside the other risk factors and drivers of child poverty, the needs assessment will require local authorities to consider the level of both in and out-of-work poverty in their locality, and assess the barriers to parental employment. The needs assessment will also set out information about family size and structure, and require local partners to assess the well-being of children in poverty in relation to each of the five Every Child Matters outcomes. In that way, the needs assessment will identify the employment and family support needs in the local area. We will, of course, consult on the regulations before they are laid.
My hon. Friend the Member for Regent's Park and Kensington, North is right to highlight in amendment 72 the importance of ensuring that parents take up all the benefits and tax credits to which they are entitled.

Sally Keeble: Apart from being concerned about the take-up of child tax credit, I am also extremely concerned about the take-up of the child care element of it. That used to be a separate tax creditthe child care tax creditbut it is now a child care element of other tax credits. In the Treasury Committee, Her Majestys Revenue and Customs representatives were not able to say what that take-up was, even though there had previously been problems with low take-up. Will my hon. Friend the Minister say a bit more about that, and indicate whether the Government might be able to provide some figures, if not now, at some later stage? The ability to pay for child care is absolutely critical if parents, particularly single parents, are to get work.

Helen Goodman: Both my hon. Friend and the hon. Member for Northavon have raised the take-up of tax credits, and my hon. Friend is right that that is as important as the take-up of benefits. The latest estimates that we have are for 2007-08, and suggest that take-up of child tax credit is 81 per cent., rising to 92 per cent. for households with incomes of less than £10,000. This is a phenomenally high take-up compared with, for example, the family income supplement, which is the benefit that was aimed at the in-work poor 20 years ago.

Steve Webb: I am grateful to the Minister for that figure. She will know that take-up is measured in two ways: the proportion of the money that is claimed and the proportion of people who claim. Could she clarify whether her 81 per cent. or 90 per cent. numbers are expenditure-based figures, in other words amounts of money? Does she have the case load figures and can she explain the discrepancy between the 60 per cent. in the household below average income figures and the sorts of figures she is quoting?

Helen Goodman: I will have to write to the hon. Gentleman[Interruption.] I will write to the Committee on that point.
I want to say something about what we are doing to improve take-up in cities, as it is important. We set up the take-up task force chaired by Sir Trevor Chinn, which published its report in the summer. Hon. Members will no doubt have had an opportunity to look at that. In essence that report proposes a more joined-up approach to encouraging take-up. One thing we are doing is piloting the placement of HMRC advisers in Sure Start childrens centres to promote take-up and reduce error in tax credit claims. We are also piloting raising the childcare element of the childrens tax credit to 100 per centin most places it is 80 per cent.to see what impact that has.
My hon. Friend the Member for Regents Park and Kensington, North was not here to speak to her amendment, but I wanted to address those points because they have been raised by other hon. Members. I hope that the Committee will agree that it is important to leave the specific detail of the issues that the needs assessment must cover to regulations, rather than insert them in the Bill.

Sally Keeble: Will my hon. Friend deal with the point about the take-up of the child care element which the HMRC reps were not able to answer? Or will she undertake to write to the Committee? It is a specific element and its take-up has been heavily criticised. Nobody quite knows why, on the most recent questioning, HMRC could not even provide the figures. Will my hon. Friend look into that and let us know, as it is such a key issue when it comes to tackling child poverty?

Helen Goodman: Of course I will be happy to look into it. If the information is available I will supply it in the letter to the Committee that covers the take-up questions.
In conclusion, I hope that the Committee will agree that it is important that the requirements in the needs assessment regulations must be deliverable by local authorities and their partners, but that the issues of family support and employment, including take-up of benefits and tax credits, are already covered by the draft regulations. I hope that the hon. Member for South-West Bedfordshire is reassured that I have presented adequate draft regulations to the Committee that meet his concerns and so will withdraw his amendment.

Andrew Selous: I would like to respond to a number of points made in the debate. I should like to reassure the hon. Member for Northavon that I recognise that low educational attainment and aspiration are fundamental to the issue we are discussing, as is the prospect of work in terms of men whom women may want to partner or marry. Job creation and family resilience are closely connected from that point of view. My proposal would work alongside those two areas.
I am sorry that the Minister responded in a semi-hostile way. I did not fully understand her logic. She said that there were a number of important areas but that did not mean that they should be in the Bill. That logic slightly escapes me. There is perhaps an argument the other way. If something is important, then perhaps it should be in the Bill. She mentioned a number of issues and made a number of accusations, to which I need to respond. She talked about the new deal. The fact is that there are many critics of the new deal in her own party. If we examine its effectivenesswhether it has provided value for money for the taxpayer and done the best possible job for the people who have been through itand if we look at the churn, it is clear that we should have higher aspirations. As taxpayers we should be demanding slightly more for our money. That is where our thoughts on welfare reform are heading, and I thought that that was where the Government were heading as well.
On apprenticeships, the Minister may have missed our announcements recently in our Get Britain Working programme. We are committed to providing even more apprenticeships. We recognise that they are important. She is also right that my party is not a fan of regional development agencies. When I referred to them this morning, I was careful to include any organisations that might follow them. We, perhaps like the Liberal Democrats, want a more local form of economic regeneration. In my own areathe east of Englandwe have little in common even with the Cambridge economy, and certainly not with East Anglias. There are arguments for localising the important work of economic regeneration more.
As for Sure Start, I am sorry that the hon. Lady repeated her accusations. They were tried by her party in the recent Norwich, North by-election, but the voters gave their verdict on them. She is not correct in what she says about my partys policy on Sure Start. We have significant plans for childrens Sure Start centres up and down the country.

Jamie Reed: That statement is at distinct odds with a recent Westminster Hall debate, when a Conservative Front Bencher said nothing of the sort.

Andrew Selous: I did not quite catch what the hon. Gentleman said, but, as my colleagues have said, we have significant plans for the health visitor network and we want to do a number of important things for childrens centres.

Helen Goodman: Is not the hon. Gentlemans party proposing to divert possibly up to 30 per cent. of the resources currently expended on Sure Start into the health visiting service? How can he suggest that he can maintain the current network of Sure Starts and take out such a large chunk of the funding?

Andrew Selous: There are questions as to how the budget is best used in Sure Start centres. Ministers seem to imagine that the only way to spend money effectively is in the way that they are spending it. The Minister talked about Sure Start centres and I have said what I wanted to say on that. Repeating allegations about other parties priorities is not helpful.
I have listened to the debate and I will not press amendment 7 to a Division. We have voted on similar areas already, so I cannot see that it would add much value. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 21 ordered to stand part of the Bill.

Clauses 22 and 23 ordered to stand part of the Bill.

Clause 24

Meaning of child poverty in Part 2

John Howell: I beg to move amendment 63, in clause 24, page 14, line 7, leave out from of to section in line 8.
I will not detain the Committee for long. The amendment is and always was intended to probe an issue that was covered in some detail this morning. I wish to illustrate the difficulties that were raised particularly by the local government representatives at their evidence session. There is a problem in being able to show the relevance of the target that the amendment would delete in the local government context. We considered that in some detail this morning in relation to Paul Carters evidence and the difficulty over the 48,000 children. We discussed it in terms of proxy targets, which covered quite a lot of the issue. It will still be useful to give the Minister the opportunity to justify a little more clearly than she did this morning the relevance of the target to local government officers, who succinctly expressed the difficulties of meeting it.

David Gauke: It is a pleasure to serve under your chairmanship again, Mr. Key. I am grateful to my hon. Friend the Member for Henley for bringing the Committees attention to this point. In part 2, the definition of child poverty is different from the one that applies in part 1, which includes the duties on the Government. The definition in part 2 is slightly narrower to exclude the persistent poverty target, but it includes the relative low income target, which uses the figure of 60 per cent. of median income.
As we heard from the experts in the evidence session on 20 October, that target is one in which the key method of achievement tends to be through the tax and benefits system. The evidence given by Richard Kemp from the Local Government Association is helpful. He argued that local authorities might have a role in safeguarding communities and preparing for new industries and new opportunities. However, he said that
there are other areaswhich might rightly be in the Billwhere you think that you have given us a duty to do something, but I will not be able to have any effect on it because those levers are outside my control. That is why we concentrate on the areas where we do have control.[Official Report, Child Poverty Public Bill Committee, 20 October 2009; c. 71-72, Q152.]
As we discussed in this mornings debate about duties and what local authorities can do, the 60 per cent. targetI am not suggesting that it is not valuable or that it is not important for the Governmentposes practical difficulties for local authorities. To put it another way, Councillor Kemp referred to the levers outside his control. Given that the Bill sets an absolute low income target and a combined low income and material deprivation target in clause 24those targets apply to local authoritieswhat levers do local authorities have that apply to the relative low income target, but do not apply to the absolute low income target or the combined low income and material deprivation targets? What does the clause 2 target in clause 24 add to the Bill that cannot otherwise be achieved, given what local authorities can practically do? We all recognise that local authorities have a big role to play, but it is not clear how local authorities, as opposed to central Government, can deliver that target.

Helen Goodman: Let me first address the remarks made by the hon. Member for Henley, who suggested removing the reference to the relative low income target from clause 24(3). The clause sets out the definition of child poverty that covers the needs assessment and local strategy. Subsection (2) states:
A child is to be taken to be living in poverty if the child experiences socio-economic disadvantage.
Subsection (3) provides that households experiencing socio-economic disadvantage include those experiencing relative or absolute low income and material deprivation. However, the definition in the clause is not limited to those measurements, and local authorities may choose to use additional measurements to determine levels of socio-economic disadvantage in their area. It is not immediately clear what the hon. Gentleman intends by his amendment, as it would not lessen the breadth of socio-economic disadvantage. I understand that he is interested in the flexibility that the definition in clause 24 affords to local partners in assessing child poverty and taking action to address it, particularly in relation to raising family income.
Local authorities and their partners understand their communities and are in a position to reach them in a way that central Government cannot. They have a clear role in raising family income and tackling child poverty, by driving economic regeneration and neighbourhood renewal, providing high-quality education in early years services, administering financial help such as housing and council tax benefits for families on low incomes, encouraging families to take up financial support, and joining up national and local partners to provide personalised skills and employment support.
This morning we discussed the measurements to be used at local level, so I do not need to delay the Committee significantly on that. I made it clear that there were a range of measures, such as NI 116, the relative low income child poverty indicator, the national indicator set, and the index of multiple deprivation. Those measures cover child poverty and the range of risk factors associated with it. Persistent poverty is not a narrow definition, and I believe that we are consistent in the two parts of the Bill.
During the evidence session, the hon. Member for South-West Hertfordshire mentioned the relative income measure, and said that he thought that it was not relevant at a local level. I do not understand how something can be relevant at a national level if it is not relevant at the aggregation of a lot of local levels.

David Gauke: I am grateful to the Minister for giving way as she referred to a point that I raised during the evidence session. The evidence that we received suggested that local authorities could play a role, but that it would be difficult for them to focus on the 60 per cent. targetthe relative low income targetas they do not have the levers to do that. They have the levers to focus on severe poverty and more general issues, which could be swept up in some of the other targets. I asked that question because that was where the evidence was taking us.

Helen Goodman: I think that that pulls me back to my first point, which is that national performance is an aggregation of the local performances.

David Gauke: I will try to make this clearer. The difference between national Government and local government is that local government has some levers, to use Councillor Kemps word, while the national Government have other levers. The evidence of Councillor Kemp suggested that the levers available to local government did not lend themselves to the 60 per cent. target, but rather to other targets.

Helen Goodman: I am afraid that the hon. Gentleman is not quite right. All the levers that are pulledto use the Heath Robinson metaphorwill, we hope, have an impact on the income measures. Those could be actions taken at local authority level, such as job creation, or things done at national level, such as on child tax credit take-up. All those measures will have an impact. It could be that the levers in the hands of central Government are more finely attuned, but it is not true to say that things done by local government will not have just as much impact on income levels. If they did not, there would be no point to part 2 of the Bill.

David Gauke: Will the Minister explain, therefore, why clause 24 provides a separate definition of child poverty? Why not just refer to clauses 2 to 5?

Helen Goodman: I will come back to that, if the hon. Gentleman will let me.
The hon. Gentleman referred to subsection (2), which states:
A child is taken to be living in poverty if the child experiences socially economic disadvantage,
and asked why we should include that in the Bill. By doing so, we can promote activity with local authorities that goes beyond the targets, which is something that he has promoted on many occasionsboth for children in the looked-after sector, who are often perceived to be at the bottom of the pile, and for families who might not fall under a financial limit, but whose level of material well-being we are trying to improve.

David Gauke: I am grateful to the Minister for giving wayshe is being generous. I agree that there is an opportunity in the Bill to go further with regard to local authorities, because they have the levers to address specific matters such as looked-after children. The problem is that the evidence we received from the local authorities was that they did not really have levers for the relative poverty target. In that case, if we are to tailor our targets for particular authorities and make them as relevant as possible, why do we not tailor clause 24 a little more and take out the relative low income target? We are trying to get an answer to that question.

Helen Goodman: Although it is enjoyable to debate with the hon. Gentleman, the proposal was only a probing amendment, and I am not entirely convinced that this debate is taking us anywhere. My argument is simple: we need to be consistent between what we do at local level and what we do at national level. I really do not think that I can helpfully add any more to what I have said.

John Howell: We have heard the most relevant question of the day: why have part 2 at all? From the answer that we have received, we know that there is no point to part 2 in its current form. There is clearly a lack of understanding of how things work out on the ground. The lack of levers and data on the ground will make things particularly difficult for local government. However, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 24 ordered to stand part of the Bill.

Clause 25

General interpretation

Steve Webb: I beg to move amendment 32, in clause 25, page 14, line 21, leave out 16 and insert 18.

Robert Key: With this it will be convenient to discuss amendment 31, in clause 25, page 14, leave out lines 22 to 25.

Steve Webb: Albeit late in our proceedings, I wish to speak to an amendment that would have a fundamental impact on the scope of the Bill.
Clause 25 gives a definition of a child, which is necessary for a child poverty Bill. The definition used is familiar, as it refers to a person under the age of 16 or those aged 16 to 18 years and eligible for the receipt of child benefit. That definition is usually used in the official figures.
Amendment 32 would take the age in the Bill to 18 years, meaning that it would cover all those under 18. If it were not accepted, surely we would be doing a disservice to the purpose of the Bill, which is to tackle child poverty. We are not using the definition of a child that is used in the UN convention on the rights of the child. That is not a clincher, in the sense that we can use whatever definition we want, but we are a signatory to that UN convention and, under it, anyone under the age of 18 yearsregardless of whether they are studying or receiving child benefithas the right
to a standard of living adequate for the childs physical, mental, spiritual, moral and social development.
I cannot understand why we want the Bill to distinguish between some 17-year-olds and others. We will be including under the Bill 17-year-olds who, on average, are more prosperous. Staying on at school is correlated with the affluence of parents, as the Government acknowledge, hence the existence of means-tested education maintenance allowance. On average, those 17-year-olds who stay on at school come from better-off households, yet those who drop out of the school system at the age of 16, for example, will be excluded under the Bill. The Bill thus excludes a series of vulnerable young people.
The first group who are not included is those famous NEETs16 and 17-year-olds not in education, employment or trainingof whom there are an estimated 124,000. Surely, if we are concerned about child poverty, a 16-year-old who is not being educated or trained, nor doing a job, has to be pretty high up on our list of teenagers whom we are bothered about. However, unless the Minister accepts amendment 32, the Bill will exclude them. It will also exclude 16 and 17-year-olds living independently, who do not count as children under the definition. It will also exclude care levers, because they leave the care system at 16 and live independently. We know that that group has a very high risk of poor outcomes, yet they are being excluded.

Graham Stuart: I wanted to mention exactly that group. Many young people come out of care and are dumped into bedsits by local authorities that are, it seems, relieved to lose responsibility for them. We are excluding that most vulnerable of groupsthey are vulnerable to prostitution and all sorts of exploitationfrom the scope of a child poverty Bill. I hope that Ministers will listen to the powerful point that the hon. Gentleman is making.

Steve Webb: I am grateful to the hon. Gentleman; he puts the point very well.
There is an issue surrounding defining a child by whatever the benefit regulations of the day happen to be. We know what the child benefit rules are now, but they could shift. A future Government could abolish child benefit for the post-16 group, which, in turn, would exclude those people from the scope of the Bill altogether. Alternatively, a Government could means-test the benefit, so better-off 17-year-olds would be out and poorer 17-year-olds in. The definition of a child could vary from year to year, but not according to anything real, as it were. From one year to the next, someone could cease to be a child, not because they got a year older, but because the benefit rules had changed, and that seems odd.

David Gauke: The deputy leader of the hon. Gentlemans party advocates means-testing child benefit. Is there a prospect that the policy will come in?

Steve Webb: Not if we have anything to do with it.
The key point is that we need to define a child in common-sense terms that accord with the spirit of the Bill. Why have just a child poverty Bill? One could argue that we should have an adult poverty Bill or a pensioner poverty Bill. We have a child poverty Bill because we are talking about people who are growing up, dependent on others and at a formative stage of life. That implies that the definition of a child should not be linked to a particular set of benefits or to something that might change over time. It certainly implies that vulnerable young people should not be excluded. There could be a pair of twinsit must be a pair, I supposeone of whom was a child while the other was not. That would be ludicrous, would it not? Under the Bill, if one 17-year-old twin was at school and the other had dropped out, one would be a child and one would not. Surely the Minister accepts that that is absurd.
The Financial Secretary might say, Ah yes, that is all very well. We really care about unemployed 17-year-olds and we have all these programmes to deal with them, but we need standard international definitions, as he has argued in the past. There is nothing stopping us having standard international definitions if all we want to do is compare our statistics with other countries but, to return to an earlier point, the Bill should be about the welfare of children and young people in this country and we should have a definition that works for that purpose. There is nothing stopping us collecting the figures on other bases for international comparisonswe are doing it anyway and it is not a problembut let us have a definition that goes up to 18. We have signed up to that definition under the international convention. It would cover a lot of vulnerable young people whose welfare is surely just as importantif not in some senses more important, in that it gives greater grounds for worryas the welfare of the 17-year-olds who are within the scope of the Bill who, on average, come from backgrounds that are more affluent. We are including some young people whom we are less worried about because they are doing well, while arbitrarily and artificially excluding some whom we have been more worried about. I commend the amendment to the Committee.

Stephen Timms: It is a pleasure to serve under your chairmanship again, Mr. Key, in our final Committee sitting.
The hon. Member for Northavon has explained the effect that amendments 31 and 32 would have, but I must say to him that our aim is to end child poverty. We want, through the Bill, to meet the targets that are applied to dependent children. My principal response to his case is that we want the targets to relate to dependent children. He acknowledged that in his remarks. When we talk about children in ordinary parlance, we are talking about young people who are dependent on others, and that is the group that the definition in the Bill describes.

Steve Webb: When I heard myself talking about that, I thought, Ooh, eck, have I just undermined my arguments? However, a 17-year-old NEET is financially dependent on his or her parents, so why preclude them from the Bill?

Stephen Timms: The Bill addresses the issue of improving childrens living standards. It is right that the definition of a child in the Bill should relate directly to the financial support that the Government provide for families in respect of childrenthat is the effect of the clause. Under the definition, a child is financially dependent on their parents. Many young people over the age of 16 who are not in full-time education might well be earning in their own right. They are not necessarily dependent, so they are not covered by the measurement of child poverty. That sets the boundary in the right place. The definition follows the approach that is taken in the survey of family resources, which has been the main survey used to measure child poverty since it began in 1993-94. The definition was also used in earlier child poverty statistics. One benefit of using that definition is that it gives us a continuous data series that runs back to, I think, 1961.

Sally Keeble: Will my right hon. Friend confirm that the school leaving age is going up to 18? By providing support through the education maintenance allowance, which is highly valued in my constituency, so that children may stay on at school beyond 16 to 18, are not the Government providing more support to 16 to 18-year-olds than has been given previously?

Stephen Timms: My hon. Friend is absolutely right about the increase in support for that group. I was going to mention the increase in support for another group who have rightly been mentionedcare leavers. Support for that important group was addressed by the Children and Young Persons Act 2008. My hon. Friend is right to draw attention to the additional funding and support that we are providing.
The hon. Member for Northavon anticipated that I would make this next point. If we are to meet the targets in the Bill in a sustainable way, national and local strategies will need to go wider than the definition of children that is used in the target, and will certainly cover youth unemployment and training. As my hon. Friend the Member for Northampton, North has pointed out, we have raised the participation age. We are also ensuring that all young people benefit from education or training, whether combined with work or not, through the future jobs fund, which supports young people into employment.
The European Union has started to publish data on poverty among under-18s. On the most recent data that it has published, for 2007, it is exactly the same as the proportion in child poverty under the households with below average income statistics. As the European Union series emergesit was first published in 2005it will enable the level of poverty in that group to be tracked.
I shall sum up my argument with two points. First, it is right to refer to dependent children in the way in which the Bill does, because that is what most people understand by the term child. Secondly, that approach has the great strength of giving us a continuous data series for comparison, going back to 1961, I think.

Steve Webb: I am grateful to the Minister. I am sure that my former colleagues at the Institute for Fiscal Studies would enjoy reworking the data back to 1961 on a slightly different definition. I have to say that I am convinced by the argument. The Minister says, We have done worthwhile things for 17-year-olds who are not defined as children. I am sure that the Government have done that, and can therefore get the credit for those things if they are included in the scope of the Bill. We can have consistent data over time on a range of definitions, because we know from the data what the 17-year-olds who were not in education were doing. We would therefore know who is excluded and who we would want to start including, if we agreed to the amendment. I return to my central point, which is that we are making arbitrary and artificial

Stephen Timms: This is a small point, but I do not think that we have the data going back to 1961 for under-18s in povertythat would be difficult. However, we know the figure for children, as defined in the Bill.

Steve Webb: A 17-year-old who responded to the family expenditure survey in 1961 as an adult, because they had left school, would presumably have had to say what they were doing. I assume, therefore, that the survey would show whether they were in employment or getting benefits, and if they were getting benefits in their own right they would have been counted as a separate benefit unit. I seem to recall that the Minister had that data, but I am open to correction.
The amendment is worthwhile and important. We need meaningful definitions and I therefore seek to test the opinion of the Committee.

Question put, That the amendment be made.

The Committee divided: Ayes 2, Noes 7.

Question accordingly negatived.

Clause 25 ordered to stand part of the Bill.

Clauses 26 to 30 ordered to stand part of the Bill.

New Clause 1

2010 poverty target
(1) The Secretary of State must, before the end of the period of three months beginning with the day on which the Act is passed, publish and lay before Parliament a report setting out an assessment of progress made towards meeting the 2010 target.
(2) The 2010 target is that in the financial year beginning with 1 April 2010, fewer than 1.7 million children live in households that fall within the relevant income group as defined by section 2(2)..(Mr. Gauke.)

Brought up, and read the First time.

David Gauke: I beg to move, That the clause be read a Second time.
Our debates on the Bill have generally, I hope, been constructively conducted, but there is no doubt that there is a view of the Bill that could be described as cynical and sceptical, and which has been advocated by my hon. Friend the Member for Beverley and Holderness on one or two occasions. That view is that the Bill is essentially distraction legislation. At the very point when the Government are about to fail to meet their 2010 target, which has been in place since the late 1990s, they have come up with a new ideaa Bill to enshrine a target for 2020. One can imagine someone sitting around somewhere in the Treasury looking at forthcoming issues, spotting a bit of a problem with the 2010 child poverty target and saying, What are we going to do about it? Well come up with a Bill enshrining a target for 2020 and nobody will particularly mind, because we have our eyes on the slightly more distant horizon and all will be well. In other words, it is a case of, Do not judge us on what we deliver, judge us on our intentions, which, if one wanted to make a partisan point, has often been the approach of this Government.
New clause 1 intends to return us to the here and nowthe nitty-gritty of delivery on previously announced targets to ensure that they do not go by the wayside and that the distraction legislation approach does not work. The Bill enshrines something more demanding than the 2010 target. As the Financial Secretary said:
The arrangement that the Bill sets out is significantly more demanding for the coming decade than the arrangements that have been in place over the past 10 years.[Official Report, Child Poverty Public Bill Committee, 20 October 2009; c. 8, Q17.]
That is all very well; we are supportive of the objective of the Bill. However, we should not forget the 2010 target and I hope the Government do not give up on it. The Minister, in his evidence, said that they have certainly not given up on it. In a moment, I will set out in further detail why this new clause would be very constructive.
Steve Webbrose

David Gauke: I am very grateful to give way.

Steve Webb: I will speak at length while the hon. Gentleman has a drink. The base line figure is 3.1 million, I think, for the before-housing-costs measure in 1998-99, so getting halfway there would be 1.55 million, if going halfway to zero. He has a figure of 1.7 million. Is that because he is going only halfway to 10 per cent.? I am not quite sure why a figure of 1.7 million has been chosen.

David Gauke: That is the basis of the number, as I understand it. The hon. Gentleman is now looking at me sceptically. On the basis of the shortfall that the Government refer to, one sees a figure of 600,000 and at the moment we are on 2.3 million, so I think that that was where we got the 1.7 million number.

Stephen Timms: I might be able to shed some light on this. The base figure is 3.4 million children below the poverty line, so 50 per cent. would be 1.7 million. The IFS estimate was that we would get to 1.1 million, hence the 600,000 figure.

David Gauke: I am grateful to the Minister for providing that clarification. Having made the political knockabout point on why new clause 1 would be helpful to prevent the Government
Mr. Stuartrose

David Gauke: But before I move on, I give way to my hon. Friend.

Graham Stuart: My hon. Friend takes the words out of my mouth. Political knockabout is holding this Government to account, ensuring that cynicism is not the driving purpose behind a piece of legislation dealing with such an important issue. The new clause is a perfect opportunity for the Government to show that their intentions are not cynical or there to distract, but serious and proper. If they accept the new clause, they will show that they are prepared to be held to account for 2010, as well as for their far away promises.

David Gauke: My hon. Friend anticipates and exactly explains my argument. New clause 1 is constructive. The purpose of the Bill, described by the Secretary of State for Work and Pensions, is to hold the Governments feet to the fire. That is a good expression, but why should we not hold the Governments feet to the fire with regard to the 2010 target? We also hear the argument that the Bill forces Governments to have strategies and reports, and to focus their mind. I think that argument is persuasive, but why not start that process sooner rather than later? Why not have some analysis in a proper report to Parliament on what has worked? Why has there been progress in reducing the number of children in relative poverty living in workless households, but not in working families, as pointed out by the Institute for Public Policy Research? How much of the progress has been because of income transfers, or other factors such as education, child care, family breakdown and all the various points that we have debated in Committee? Why did progress stall a couple of years ago? For two years child poverty numbers went up and then stayed static.
All of that could be addressed in a report that could provide useful analysis and guidance for future actions. We could have a better appreciation of the significance of the recessiona point that has come up once or twice during our proceedings. The evidence from the likes of the Institute for Fiscal Studies is that the recession does not have a straightforward negative impact on child poverty, although one might be forgiven for thinking that it does, listening to some of the things that Ministers have saidin Department for Work and Pensions questions on 29 June in fact.
I asked the Minister a question about child poverty targets and she replied:
Everyone, even the hon. Gentleman, must understand that in the current economic circumstances meeting the 2010 target is a real challenge.[Official Report, 29 June 2009; Vol. 495, c. 10.]
We could infer from that that the current economic circumstancesthe recessionhave driven child poverty up, but we know that not to be the case. Child poverty is a relative measure and, because median incomes tend to be hit harder by recession than those who are on benefits, by and large there is a small negative effect. There is an impact on the public finances and, to be fair, in the course of the evidence session the Financial Secretary made it clear that that was the concern. It is worth bearing in mind that there is a choice that is often followed. I refer the Committee to the evidence given by Mike Brewer:
The Government had a choice, particularly at the time of the fiscal stimulus. They had a choice between where to spend the money and they chose, for example, to keep the higher rate of personal allowance, which they introduced under a personal, temporary measure, rather than spend it on tax credits.
I mention that because the Government might have acted differently if they had had to submit a report to Parliament in the near future explaining the progress towards the 2010 target. Perhaps a bit of hauling of the feet to the fire in the immediate future might change policy decisions on the upcoming public borrowing requirement.

Graham Stuart: Will my hon. Friend give way?

David Gauke: Let me give a further quotation from Mike Brewer:
The Government could have spent some
of that money
on tax credits...That would have made a severe dent in child poverty, and I might well be sitting here now telling you that the Government were on track to hit their child poverty target.[Official Report, Child Poverty Public Bill Committee, 22 October 2009; c. 118, Q234.]
That could have been done, and the Government might have had a different approach to the 2010 target if there had been a report.

Graham Stuart: Does my hon. Friend wonder, as I do, whether the 10p tax measure, which penalised so many low earners, would have been brought in by the Government before the election that never was if Ministers had known that they would have to produce a report showing the impacts? My hon. Friend will be aware that there are still losers from that 10p tax fiasco.

David Gauke: I am grateful to my hon. Friend. It would be necessary to look closely at the data to see if the remaining losers were families with children.

Sally Keeble: Will the hon. Gentleman give way?

David Gauke: I was expecting the hon. Member for Northavon to intervene but, failing him, I certainly give way to the hon. Lady.

Sally Keeble: The hon. Gentleman should look at what happened with the 10p tax issue. I felt strongly about it, but only in relation to women between the ages of 60 and 64, for whom there has never been any compensation. If the hon. Gentleman looks closely at what happened, families with children, for the most part, were big gainers. I have looked up the figures for my constituency. There were very large amounts of money a week, not just 10p on the tax. The hon. Gentleman is quite wrong about the impact that that measure had on families with children, albeit that it impacted unfairly on other groups, particularly women.

David Gauke: I am grateful for that intervention. I am not sure that I am wrong because I was not particularly making that point. Perhaps she is saying that my hon. Friend the Member for Beverley and Holderness is wrong.

Graham Stuart: Outrageous.

David Gauke: My hon. Friend can defend himself. In my experience he rarely is wrong. I am grateful for that intervention.
Kate Green, from the Child Poverty Action Group, made the point about the 2010 target when she said:
However, there is clearly an important issue for us and for Parliament in terms of the credibility of the Bill and of making sure that as much is done as early as possible to continue progress towards the 2010 targetnot least because children cannot wait until 2020 to see the quality of their lives improve. [Official Report, Child Poverty Public Bill Committee, 20 October 2009; c. 31, Q75.]
Let us not forget the 2010 target. It would help to maintain credibility in that target, ensure that lessons have been learned from the successes and failures of the Governments strategy over the past 10 years, and gain a better understanding of what needs to be done, if the new clause were accepted. It would strengthen the Bill. As my hon. Friend the Member for Beverley and Holderness rightly says, it would undermine those who consider that there is a cynical element to the introduction of the Bill.

Steve Webb: I will be brief. A report on progress on the 2010 target would be welcome. I should explain my earlier intervention. When the 1998-99 baseline figures were originally produced they were 3.1 million. The Government then changed to a different equivalence scale which took them to 3.3 million. Then Northern Ireland was brought in which takes us to 3.4 million. That explains my confusion. I apologise for that. I am grateful to the hon. Member for South-West Hertfordshire for not pointing it out at the time. However, it raises an intriguing point about what constitutes progress towards a target that we used to think was zero but now turns out to be 10 per cent.
I am about to try to get the Government off the hook slightly: if we make the 2010 goal attainable, they might try to attain it. If we start with 3.4 million and we are trying to get, not to zero in 2020, but to 1.2 million children, then half way is not 1.7 million, it is 2.3 million. That would be half way to the target, not half way to abolition because they have given up on abolition. The current figure is not 2.3 million; it is 2.9 million and has been 2.9 million for the last five years. We have made no progress on child poverty in the last five years. So even getting from 2.9 million to 2.3 million would be a real achievement in those three years.
Perhaps it is naive of me to suggest this, but if the Chancellor knew that the 2010 goal was 2.3 million, not 1.7 million, he might think that it was feasible and he might take measures in the pre-Budget statement, even at this time. Could the Financial Secretary mention to the Chancellor that, were he to take measures that would take a projected 600,000 children out of poverty by 2010, we would be prepared to regard that as reaching the 2010 target? I am happy to place that on the record. It raises a serious question about what constitutes progress on the Bill. We thought that we were heading for zero. Now we know that we are only heading for 10 per cent., so it is not quite as unattainable as we originally thought.

Graham Stuart: This is an honest inquiry. I am aware that Liberal Democrat Members rarely converse about these matters. Has he cleared that statement on the record with the hon. Member for Twickenham (Dr. Cable), as I would hate him to be taken by surprise?

Steve Webb: I shall do so during the imminent Division in the House. I cannot see any reason why we would not want a report on progress towards the 2010 target. We might have an argument about what the 2010 target is, but a clause to that effect in the Bill would be entirely welcome, regardless of whether it is in these precise words or at this point in our deliberations. A report would be entirely welcome.

Sally Keeble: I am grateful for the opportunity to speak on the new clause because it gets to the heart of some of what the Bill is about. I understand that there is some cynicism among Opposition Members, but I am surprised at what the hon. Member for South-West Hertfordshire has been saying. It seems to go something like this: The Government, in order to distract attention from what theyre doing and because theyre worried that they might lose the election next spring, are trying to pass legislation that will tie us lot into something that we dont particularly want to do. Therefore, were trying to push the ball back and talk about what happens in 2010.
Were the Government doing that, it would be unworthy. It would also be unworthy to use the Bill as a political ploy or dividing line. I do not think that it is. I think that the vast mass of organisations that have given us evidence are concerned about having a straightforward approach to dealing with child poverty. To deal with the point made by the hon. Member for Northavon, the reason why it is child poverty and not everybody elses, is that all the statistics show, as he knows, that children are the most likely people in this country to be in poverty. They can do nothing about it because they are dependants. That is also the point of defining the age range, although I agree that over the next three, four or five years, attitudes towards 16 to 18-year-olds will change dramatically. We may well have to go back and ask what a child is, because our understanding of what young people between 16 and 18 should be doing is changing.
On the point about the numbers, the hon. Member for South-West Hertfordshire knows, because he and I have sat on the Treasury Committee together and have been through the figures, that the Government have always been accountable for the figures. There has always been the opportunity to press. There have always been criticisms of the fact that the 2010 target is challenging, that there were hiccups at certain points and that it depends on the definition of poverty. One of the important factors in the Bill is that we are not just looking at relative and absolute poverty; it is about material deprivation as well, which is stunningly important.

David Gauke: As the hon. Lady says, the Government have always published the figures and been accountable, the Treasury Committee asks questions about them and so on. However, the view that the Government have taken and that we have supported is that a statutory framework would add some value. The point of new clause 1 is to include within that statutory framework something to do with the 2010 target.

Sally Keeble: The hon. Gentleman has conceded that he was wrong to be cynical, which I certainly welcome. In the years to come, I think that issues of material deprivation will be more important than ever. It was interesting that when Save the Children gave a presentation on the subject, the issue that the young people brought up time and time again was going on holiday. There was a time some years ago, when I was a newspaper reporter, when if one talked about a family being in poverty, someone would say, But do you know theyve got a colour television set? They cant be poor. Now it seems that people say, Well, they cant be poor, they go on holiday. Actually, it is right that Parliament should assert that children and families are entitled to go on holiday and have friends round for tea. It is expected that children should have their own bedroom and other such things. I hope that it will also be possible to introduce measures about living space, which I discussed with my hon. Friends the other night.

Graham Stuart: The whole purpose of the Bill is to put child poverty targets on to a statutory footing to ensure that Governments take them seriously and deliver them. The purpose of the amendment is to ensure that the 2010 targetthe immediate oneis not forgotten. I therefore hope that the hon. Lady will support the amendment or tell us now why putting the 2010 target in the Bill is harmful.

Sally Keeble: I will come to that. I agree that there has to be transparency. It is also important that we are able to measure properly what is happening and follow through the statistics. One of the most important measures in tackling child povertythe only such measure in the Budget or the previous years PBRis the change in housing benefit rules, which has come into force while the Bill has been making its way through the House. The rules were to be changed around October-November time so that more child benefits could be retained rather than double-counted and clawed back. That was worththe hon. Member for South-West Hertfordshire should remember this, because he was on the Treasury Committee with me and we heard this togethereither £250 million or £350 million, which was calculated to get a certain number of children out of poverty. I am sure that, as with the similar change in housing benefits for pensioners, local authorities will have problems, but I suspect that the change in housing benefit rules will ultimately lead to a change in the numbers. That will probably happen next spring.
The hon. Member for South-West Hertfordshire asked why it is necessary to enshrine the measure in legislation, and we have discussed part 2 of the Bill. It is important to recognise that there have been efforts to address the issue and to get all the other agencies involved without a statutory framework. That was done through the new deal for communities programme, which was introduced in 2000 or 2001. The local strategic partnerships were also set up so that all the agencies could come together, starting with the poorest 25 per cent. of local authorities, to bend their purchasing power to tackle poverty. While that had some effect, it did not work particularly well, so it is important to have legislation stating that all the agencies should work together to tackle child poverty. There should be a statutory framework, not only for the Government target, but also for local agencies and authorities to bend their purchasing power.
The next issue is why we do not tack on to the Bill a provision that requires the local agencies and authorities to say what they are doing in three months time. The Government have been open about the difficulties that they face in meeting next years target. No one is in any doubt about that: the Work and Pensions Committee has probably looked at it, the Treasury Committee has certainly looked at it and there have been questions in the House. We all know that there are difficulties.
The issue could have been dramatically avoided if, instead of taking 2.5 per cent. off VAT, we had spent the money and tacked it on to tax credits. The hon. Gentleman might recall that that was one of the things that I proposed on the Treasury Committee, but the other members were not startlingly enthusiastic about it. The cost of the VAT cut was £2.6 billion, which was the exact amount needed to deal with child poverty.

David Gauke: It was £12 billion.

Sally Keeble: I recall that it was £2.6 billion, but I will look again at the figures. I have the disadvantage of not having inspiration coming to me via pieces of paper while I speak. As I recallI will look at the papers that we had at the time

David Gauke: I think that I can help the hon. Lady, although I was off the Treasury Committee by the time that this happened. The VAT cut was worth £12 billion. The increase in the personal allowance, which was made permanent, was worth £2.6 billion, which could have been used for increasing tax credits.

Sally Keeble: I thank the hon. Gentleman. I recall that, at the time, we could have said, Instead of tacking it on, we can increase the tax credits and that will, at a stroke, deal with the whole problem of child poverty. However, there was not a great mass of people jumping up and down saying, Thats a really clever idea. We need to recognise that, although we all agree with the end of child poverty, we are not always so happy about voting for the means to do it, particularly when times and priorities are tight.

David Gauke: The hon. Lady is making a persuasive case for new clause 1. Does she think that, had the new clause included a statutory obligation to put the report in place, that may have increased her leverage and influence in the Committee and that she might have won that argument?

Sally Keeble: No, I do not think that at all. That was some time ago, when circumstances were different and we were looking at different options. To make the first aim of the Bill, which is effectively being passed in the new year, the production of a report in three months time is not quite the point. The Bill is supposed to end child poverty. However, I understand and share Committee members concerns. It is a bit like the example of full employment with unemployment still at 5 per cent., but in this case, ending child poverty means that the figure is still 10 per cent.
In passing legislation that has some challenging targets and a lot of important measures that relate to changing the way that people work and that considers the work of a range of local agencies to find ways to co-operate and tackle a problem that has defied Governments for a good period, it is not constructive to say that a report must be produced in three months.

Graham Stuart: May I point out that quite the opposite is true? There could be nothing better than a report on what progress the Government have made, including what has worked and what has not, to create the platform from which, based on a realistic assessment of past efforts, we can move towards the diminution, if not the eradication, of poverty among those who technically qualify as children under the Ministers aim. Surely, it is the right thing to do: it is focused on the now and on understanding what has gone on before, and it informs the future. The hon. Lady should support the amendment, because it is absolutely in line with what she has said.

Sally Keeble: It is actually a new clause, not an amendment. We have had reports on what has happened with the 2010 targets. We have had reports on what works and on what is projected to happen. I hope that we will have some more measures in the autumn statement, which we will get soon, that will help to deal with some of the problems that we face tackling child poverty as we come out of the recession. It is not very impressive to suggest passing legislation that will at first produce a report, knowing about all the work that has gone into it and knowing what issues and challenges are involved. That is more a demonstration of Opposition petulance than of having a concerted commitment to taking the powers in the legislation, which will be difficult to implement. It will be challenging and will call on a whole range of agencies to look again at some of their work and priorities, and it will take some time for the effects to work through.
The focus should be on getting the legislation and workings in place, and after a reasonable time, we can come back, see how the legislation has worked and ask, Has this way of getting local authorities to work together and look at these measures worked? We also need to ask how we are getting on with tackling not only absolute and relative poverty, but material deprivation. There are some real challenges, including in relation to housing.
I very much hope that the result of the Bill will be to reduce child poverty and that how we regard the issue will change. I also hope that the legislation will make us much more intolerant of some of the material deprivation that affects the lives of poor children, as well as making us intolerant of the absolute and relative poverty in which, unfortunately, too many children in this country still live.

Stephen Timms: I am grateful to my hon. Friend for making some important points. The hon. Member for South-West Hertfordshire made the point that, on the whole, there has been a constructive tone to these debates. He is right, and I am glad that that has been the general tone of the Committee. The arguments presented have not been overstatedthere has been the odd exception, but on the whole that has been true. I welcome such an approach.
As we have heard, the new clause would require the Secretary of State to publish a report on progress towards reducing child poverty by half by 2010. I suggest to the hon. Gentleman that the aim of such a report is, in fact, already covered in the Bill, because clause 8 will require the Secretary of State to publish a strategy that sets out the measures that will be taken to meet the child poverty targets in clauses 2 to 5. To ensure that the Secretary of State reports on the progress on tackling child poverty, clause 13 will require the Secretary of State to produce and lay before Parliament an annual progress report.
Through that combination, what the hon. Gentleman is endeavouring to secure with the new clause will be delivered, although it is true that it will happen a little laterI suppose that three months after the Bills Royal Assent is likely roughly to take us up to summer next year. The process that I am describing will take a little bit longer. He said that his aim is to keep feet to the fire regarding the 2010 target, but he does not need to worry too much on that score. Feet will be kept to the fire on that, as we have seen and, no doubt, will continue to see.
The hon. Member for Northavon suggested that, according to one interpretation, we would actually hit the 2010 target. His former colleagues in the Institute for Fiscal Studies have suggested that, on the basis of the measures that have been announced, child poverty is likely to reduce by 1.1 million by the end of the financial year 2010-11. On the calculations that the hon. Gentleman set out, that would be halfway towards eradication as defined in the Billit is kind of the Liberal Democrat party to laud the Governments success.
The other way that we could look at the matter is in relation to the absolute poverty target, which has already been halved. We could say that we hit the target on that basis, but many people would accuse us of shifting the goalposts rather radically if we did so. I think that it has always been understood that the 2010 target meant a reduction to 1.7 million from 3.4 million, or that it related to the number living below the relative poverty line.
Nevertheless, I suggest to the hon. Member for South-West Hertfordshire that, in effect, what he wants to happen will happen in due course under the arrangements already in the Bill. Having an extra report next summer is not really going to help. I therefore hope that the hon. Gentleman will withdraw the motion.

David Gauke: I am grateful to the Financial Secretary for his comments. However, the strategy and reports contained in the Bill relate specifically to the 2010 target. On that basis, new clause 1 would add something to the Bill. I shall therefore press for a Division.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 7, Noes 7.

Question accordingly agreed to.

New clause 1 read a Second time.

Question put, That the clause be added to the Bill.

The Committee divided: Ayes 7, Noes 7.

Question accordingly negatived.

New Clause 2

Benefit levels
The Secretary of State shall ensure that a household wholly dependent on tax credits or social security benefits has an income at, or above, the relative low income target in section 2 (the relative low income target)..(Steve Webb.)

Brought up, and read the First time.

Steve Webb: I beg to move, That the clause be read a Second time.

Robert Key: With this it will be convenient to discuss new clause 4Minimum income standards
(1) In the exercise of his duties, the Secretary of State shall have regard to minimum income standards.
(2) It shall be the duty of the Secretary of State to commission research into the minimum levels of household incomes necessary to sustain a healthy diet, other necessities, safety and wellbeing for children (in this Act referred to as Minimum Income Standards)..

Steve Webb: I think that everyone was baffled by those decisions, Mr. Key, but I am sure that you know what you were doing.
We have now reached the final group of new clauses, which touch on a fundamental point about the Billwhether it is possible to achieve the 2020 child poverty target with benefit rates that are not themselves above the poverty line. Under new clause 2, someone who is wholly dependent upon benefits or tax credits would have an income of at least 60 per cent. of the median poverty line. New clause 4 was tabled by the hon. Member for Beverley and Holderness, and I have added my name to it. I know that the Committee appreciated hearing the evidence of Rev. Paul Nicholson and the Zacchaeus 2000 Trust, who suggested amendments along these lines. I shall return to new clause 4 in a moment.
New clause 2 is fundamental. We talked earlier about levers and what local and central Government can do. New clause 2 is about what central Government can do and the rate of social security benefits and tax credits. If we do not accept new clause 2, there is a logical inconsistency in the Governments position. To quote the Bill, they want to eradicate child poverty, but they are not prepared to set the rates of benefits and tax credits at levels that lift people clear of the poverty line.
Government rhetoric at moments such as this is, Yes, but we do not want people on benefits. We want them in work. Unless we are going to have full employment, nobody out of work and nobody at home looking after their children, there will always be somebody on benefits and tax credits. The question is whether it is acceptable to have a Bill about eradicating child poverty and an explicit lever of Government policy that puts people into child poverty. It is that fundamental inconsistency that we are seeking to raise through new clause 2.
In the spirit of inquiry, I asked the House of Commons Library staff to do some sums for me, which they are always pleased to do. I asked them to compare the poverty line in the Bill60 per cent. of medianwith what somebody wholly dependent on benefits and tax credits would have to live on. They came up with some very interesting figures. They calculated that a lone parent on benefits and tax creditsgetting average amounts of housing benefit I assumeis already clear of the poverty line. That does not mean that there are no lone parents living in poverty. The House of Commons Library figures show that taking the Governments tax benefit model tables and assuming full take-up with people getting everything to which they are entitled, including, I think, an average amount of housing benefit, a lone parent would already be clear of the 60 per cent. median poverty line. However, the figures also show us that many lone parents are not clear of the 60 per cent. median poverty line. That raises an issue of why not, to which we shall come back.
Couples, interestingly, are not clear of the poverty line. On average, a couple with one child, getting all the benefits and tax credits to which they are entitled, based on the tax benefit model tables, is 7 per cent. below the poverty line and a couple with two children is 11 per cent. below the poverty line. On the basis of those figures, the Government are paying couples with children a benefit and tax credit rate below the poverty line while trying to pass legislation to eradicate child poverty.

David Gauke: Has the hon. Gentleman just identified or described what is sometimes called the couples penalty?

Steve Webb: No, for reasons that I will explain. There is a fair point about rates of benefits and tax credits to couples relative to their poverty line, which is different from that of lone parents. There are relativities in the system. Why do lone parents get more money? It is not necessarily pro rata to their needs but because they are, on average, more deprived in other ways. The amount they are paid in benefits and tax credits is trying to do something else, as well as meet needs.

Sally Keeble: I asked the Library to produce similar figuresthough not for the same purposeat the time of the 10p tax issue or disaster, whatever one wants to call it. It was particularly marked that in two-parent households with children, income and poverty levels were entirely dependent on quite small changes to the number of hours worked. If both parents worked a few hours or one of them worked full time, the relative changes in the income level were marked. Could the hon. Gentleman say how the figures he has would look if one person did part-time work or if one worked full time, so that their entitlements changed?

Steve Webb: To be clear about the figures I am using, the question I asked was, What would be the income of a couple with children wholly dependent on benefits? In other words, the bit of their income that the state controls. That is not to do with wages. If they are earning, as the hon. Lady rightly says, there can be quite big jumps as soon as they do 16 hours or whatever it happens to be. My point is that there will always be families with children, couples and lone parents wholly dependent on benefits and tax credits. It would be odd of the Government to set benefit and tax credit payments below their own poverty line, when they are passing legislation to eradicate child poverty. I do not see how those measures can sit together. That is linked to the minimum income standard argument that we will discuss later.
I have discussed a theoretical situation with a hypothetical lone parent and couple. The actual situation is much worse. Half of the children in poverty are in non-working households; 30 per cent. have non-working lone parents and 19 per cent. are in non-working two-parent households. That means that almost 1.5 million of the 2.9 million children in poverty are wholly dependent on benefits or tax credits. Even if we could deal with the 1.5 million children from working households who are in poverty by providing better child care, education, training and jobs, we would be left with more than 1.2 million children below the Governments poverty line and would fail to meet our 2020 target.
No Governments have set benefit and tax credit rates high enough to lift people clear of poverty. I have moved from the hypothetical to the real: 30 per cent. of children in poverty have lone parents. There is no reason why they are in poverty other than the level of benefits and tax credits.

Graham Stuart: The hon. Gentlemans logic is impeccable. What assessment has he made of the effect on incentives to work if benefits were raised to remove those families from poverty? Even if poverty is technically eradicated under our relative definition, will not the culture of worklessness and other problems persist if families do not gain the benefit of being in the workplace?

Steve Webb: The hon. Gentleman is right. There are many trade-offs in these matters, and he highlights one.
My point is that we can do one of two things. We could say that we are legislating to stop people living in poverty, which we define as being below a certain level. If we are aiming to eradicate poverty, another arm of Government cannot leave people in poverty. The other option is to say that it is a specific aim of Government policy to pay people below the poverty line so that they are driven into work. Under that world view, driving people into work is more important than people having a standard of living above the poverty line. We cannot do both things at the same time, but the Bill tries to do that.

Jamie Reed: The hon. Gentleman is making a persuasive case. Like the hon. Member for Beverley and Holderness, I have anxieties about this discussion. I have a great deal of sympathy with what the hon. Member for Northavon is saying, but I am concerned about the potential for creating regional ghettos. Parents who have been out of work for a long period are likely to be in areas of profound market failure, where employment is hard to come by. I am not saying that the benefits system is what it should be, but if we provide an even better benefits system to prevent people from being in poverty, we may end up consigning generation after generation to increased dependence on the state. Does he share that concern?

Steve Webb: I understand what the hon. Gentleman is saying. One measure of poverty in the Bill is persistent poverty. How can we avoid children living in persistent poverty in such unemployment blackspots? We can and do try to get mum or dador bothinto work. However, many are dependent on benefits for three years out of four. If we do not give them enough to live on, relative to the thresholds, we will not achieve the target in the Bill. We could set benefits at such a level that we drive people to take jobs, come what may, because they cannot otherwise survive. My worry is that we are saying inconsistent things.

Jamie Reed: The hon. Gentleman makes a logical and analytical dissection of a real issue. I am not sure what the answer is, and I am not sure that he is either.

Steve Webb: I suppose that I am asking the Government to be explicit about what they do. Do the Government set benefit levels to lift people out of poverty? Clearly not. We define poverty in the Bill, and benefits and tax credits are not enough to lift a couple out of poverty. What are the Government doing? Will they state explicitly that when benefit levels are set, they are not trying to lift people out of poverty, but seeking to provide people with short-term relief as a temporary measure for something else? What about long-term sick and disabled people and the argument, We want them to get a job? A set of people exists who are not going to get a job. What do we say about those people if we consign them to long-term dependence on a rate of benefit that we have spent the last three weeks defining as poverty? That is my point.

Sally Keeble: The hon. Gentleman spoke about the number of two-adult households that live in poverty, which is very striking. Does he agreehe hinted at this pointthat often in those families, at least one adult is not capable of working? Often, someone is not able to work because of a disability or a long-term illness. Sometimes, they have been involved in crime and are in and out of prison, or they might be transient and unable to work. Does he agree that there are often explanations of why two-adult households that do not work and live in poverty are in that position? They will sometimes be attracting other benefits.

Steve Webb: Absolutely. That reinforces my point. The glib response to my point is, Yes, but work is the answer. Work, work, work. Lets not pay people too much money because it discourages them from working. The real way to get people out of poverty is to get them to work. I wonder whether there will always be more than 1.2 million children living in households that are wholly dependent on benefit, because their parents are long-term unemployed, sick, temporarily unemployed, or whatever. Unless benefit levels are set at or above the poverty line, is it physically possible to achieve the 2020 goal?
What has frustrated me about our discussionsI did not think about this until I looked at the numbersis that until we ask ourselves about the right level of benefits relative to the poverty line, we cannot think about whether we will ever achieve these goals. That comes back to our 2017, panicky, pulling-the-levers-of-income-transfers point.
I will give one more example of my point. For a low-income household, it is something even more alarming. The risk of being in poverty changes according to whether someone is on a certain benefit. The national average for the risk of living in poverty is 29 per cent. [Interruption.] I am sorry, there is a 23 per cent. risk. Children whose parents claim jobseekers allowance have a 70 per cent. risk of living in poverty. If their parents are on income support, it is a 54 per cent. risk, and if their parents claim working tax credit, it is a 29 per cent. riskthat is the number I read out by mistake.
A child is three times as likely to live in poverty if their parents claim JSAof course, because they are unemployed. However, the point is that JSA is set by the Government. Income support and working tax credit are set by the Government. The Government explicitly set benefit rates that inflict three times the risk of living in poverty on those children whose living standards they determine.

Graham Stuart: I entirely accept the logic of what the hon. Gentleman says. Regardless of the legislation, does he believe that we should set benefit rates above the poverty line? Is that the right thing to do in the broadest sense, regardless of the Bill? Is that the right policy?

Steve Webb: This is where new clause 4 comes in. I am saying that, if the poverty thresholds and the targets in the Bill mean anything, we should at least think about those thresholds when setting benefit rates. We patently are not doing that. It would cost a lot of moneyI do not know how much because the numbers are quite complicated, but it would be billions of pounds, and I am certainly not committing to thatbut if we set benefit rates each year without thinking about the thresholds on which we are legislating, we might as well give up as we are not going to achieve our goals. That is my point.

Sally Keeble: I remember reading those figures as well, although I might have been looking those for a different year. However, I think that the group that is most likely to be in poverty is families on housing benefit. Being on that benefit is one of the prime indicators of poverty. A measure that allows families on housing benefit to retain more of their child benefit is an effective way of tackling of chid poverty, because it puts more money into exactly families that are at the highest risk of poverty.

Steve Webb: The hon. Lady is right. There is a 53 per cent. risk for people on housing benefit, which is higher than the average, but still lower than the risk for those on jobseekers allowance. I have no problem with helping families on housing benefitsthey are, on average, a poor group who should be helped. However, surely the Treasury has worked out internally whether we will ever achieve the goal of the Bill as long as we pay benefits below the poverty line, which is what we are doing. Is it possible to achieve the 2020 target without paying benefits and tax credits at or above the 60 per cent. median? It might not be. Furthermore, a single parent who claims everything should be clear of the poverty line, but 30 per cent. of children in poverty are the children of single parents on benefits. Why are so many of them still below the poverty line?
Finally, let me turn to the issue of minimum income standards, which is addressed by new clause 4I shall speak to it now to save me from coming back to it. I have suggested setting benefit levels by making them relative to the poverty line under the Bill, but another attractive approach would be to make them relative to what people need to live onthe Joseph Rowntree Foundation used to talk about subsistence and modest but adequate levels. The measure would enable an intelligent discussion about the adequacy of benefit levels, which I am afraid we do not have in British politics at the moment. We simply set benefit levels on the basis of what they were the previous year, plus a bit more.
Every Government have been terrified of opening a can of worms by asking how much is enough to live on. However, that is done in plenty of other countries, such as Norway, Sweden, Germany and Canada. Minimum income standards are not novel. Unless and until we talk about how much we are paying people who have no other income and how that relates to their need, I am not sure that we can address the issue of child poverty properly. The living standards of adults without children have fallen massively in the past 15 years, as they were the group whose benefits were least prioritised. Benefits for children and pensioners are linked to earnings, but there are groups of people who are highly dependent on benefits whose living standards have fallen and fallen, and who cannot attain the modest but adequate benchmark.
I shall conclude my remarks by saying that all I am pleading for is that we cease setting benefit levels arbitrarily. Benefit levels now are essentially what they were post war, when most of the current situation was invented. Benefits have been uprated on a whole variety of ad-hoc bases with no relation to anything outsidethat is the key. When we are setting benefit and tax credit levels, let us relate them to something real, whether that is the definition of poverty in the Bill, or a minimum income standard that is needed for someone to have a modest and adequate standard of living, rather than just plucking them out of the air and saying, How much cash do we have this year? Lets add inflation, plus a little bit. We should set benefits objectively, which would be a firmer foundation for tackling child poverty in the future.

Graham Stuart: It is my pleasure to have tabled new clause 4, on which the hon. Member for Northavon just commented. The new clause sets out an entirely different approach. Nowhere in the Governments measurements of poverty is there any estimate of what it costs per week to live healthily in the UK. Low income is a statistic, not a measure of the weekly cost of items in a family budget. The centre for research in social policy at Loughborough university and the family budget unit at the university of York define a minimum income standard as follows:
A minimum standard of living in Britain today includes, but is more than just, food, clothes and shelter. It is about having what you need in order to have the opportunities and choices necessary to participate in society.
The Government themselves, in the explanatory notes to the Bill, state:
Children are materially deprived if they live in households that cannot afford a range of basic activities, such as...school trips for the children, or celebrations on special occasions, or if they cannot afford basic material goods, such as fuel to keep their home warm.
The targets in the Bill must be credible. It would be offensive to claim credit for meeting a statistical target, or making progress towards it, if the target means nothing to children living in households lacking basic material goods. To avoid that, I suggest that we must take minimum income standards into consideration to ensure that the income distribution calculation of the poverty threshold never falls below the income required to meet basic costs.

Sally Keeble: Will the hon. Gentleman give way?

Graham Stuart: I shall give way to the hon. Lady in a moment, if I may.
My new clause does not prescribe what the Government must do, but it does suggest that they must keep up to date an assessment of what a minimum income standard would look like. That would at least allow policy makers to compare what that looks like with the actual moneys that families receive. This is the right time to demand a proper, evidence-based minimum income standards methodology against which to check the adequacy of the Governments income thresholds.
A combination of a minimum income standards approach and an income distribution approach is already in use in Britainin the calculation of the London living wage by the Greater London authoritys living wage unit.

Sally Keeble: Will the hon. Gentleman give way?

Graham Stuart: I will, as I said, give way to the hon. Lady in a moment.
The hon. Member for Northavon refused to commit to, or say that he necessarily supported, raising the benefits threshold, despite having pointed out the logical inconsistency of a Bill that says that it will eradicate child poverty but none the less does not ensure that benefit levels put families above the child poverty level. The right hon. Member for Birkenhead (Mr. Field) always puts the case that a combination is needed. Perhaps we are talking about more generous benefits combined with time limits on the period for which people can access them. I do not blame the hon. Member for Northavon for not taking an intervention on this point, as he had been generous at taking interventions, but if I had been allowed to intervene yet again, I would have asked whether he thought that more generous benefits coupled with time limits might have been an appropriate approach.
New clause 4 would not oblige the Government to change what they do, but it would mean that they would have to provide the information that I described, against which one could then measure actual outcomes, especially if any Governmentwhichever party was in powerclaimed to be serious about eradicating child poverty.

Sally Keeble: Given that the Conservative party did not support the minimum wage, which was the basic underpinning[Interruption.] There is no point Conservative Members groaning about it. The minimum wage represented the basic underpinning of the whole tax credits systemthere has to be a minimum wage to be able to have the tax credits. I do not think that that party even supported the minimum income guarantee for pensioners. Given that, how on earth does anyone think that that party will be taken seriously when talking about minimum income standards?

Graham Stuart: Some of my colleagues had anticipated the quality of that intervention. We might as well discuss Disraeli or CND, which doubtless features in the hon. Ladys past. We have to deal with policy today. If she bothered to read the new clause, she would see that it does not say that these amounts must necessarily be paid out. It says that the Government should publish and maintain the information, which anyonechild poverty campaigners and so oncould use as a lever with which to engage with the Government and hold them to account on eradicating child poverty. Despite the hon. Ladys years on the Treasury Committee, I think that she fails to understand the combination of tax credits and the minimum wage. Of course, the minimum wages actual impact, given the provision of tax credits, is rather more slight than perhaps she would have us believe.

Steve Webb: In the interests of not ending the harmony that we have enjoyed in Committee, I will support the hon. Gentlemans new clause. Does he agree that having benchmarks for different sorts of families would allow us, for the first time, to assess whether the benefits structure disadvantages particular families? For example, the benefit levels for families with three children or with one child could be compared with the needs of such families. I do not have a strong feeling on whether the benefits system adequately compensates for the costs of additional children, so the benchmarks would help us to do that. That would give us some useful benchmarks for families with different numbers of children, or for pensioners as opposed to non-pensioners.

Graham Stuart: I completely agree; obviously I defer to the hon. Gentleman on data gathering. Those benchmarks would provide another way of looking at benefits and, in the context of the Bill, at child poverty and the reality of what it is like to live in families with such incomes. The hon. Gentleman makes a good point, as that approach would help us to understand better the granularity of poverty and the way in which it impacts differently on families with different make-ups. He has already noted that, under the existing set-up, couples technically appear to be more likely to be in poverty, when claiming benefits, than a lone parentthat is the so-called couples penalty. Although I hope that the Government will consider the new clause, it is probing, and I have spoken to it in that spirit.

Andrew Selous: We have had a really important debate, and I am grateful to the hon. Member for Northavon for setting out so clearly and cogently his case for new clause 2. He claimed that the Bill will be fundamentally intellectually incoherent and dishonest unless we have an answer to his question. Notwithstanding the fact that he said he was not committing his party to spending the money required to bring those benefits up to the level that would bring all the groups he talked about out of poverty, the fact remains that he has identified an inconsistency between what the Bill states it will do and the fact that benefits are currently set below the poverty targets in clauses 2 to 5.
There are a couple of bigger questions that underlie the whole debate. The issue of work incentives has been raisedabsolutely correctlyby hon. Members on both sides of the Committee. Concern was raised about the fact that one could perversely trap communitiesif not in poverty then in the benefits systemby increasing benefits to a level that leads to problems with work incentives. The Treasury monitors that issue closely and looked at it extremely carefully when the issue of income disregards was addressed, so I shall listen with great interest to what the Minster says about work incentives.
The other huge issue that is relevant to the debate is that of the economic and fiscal circumstances within clause 15 and the overall fiscal envelope in which the benefits system exists. It is already large and adding significantly to the debt and deficit problems that the Government face. We need a wider discussion about that and to be absolutely clear on the overall limits before going down that route.
With regard to new clause 4, which was tabled by my hon. Friend the Member for Beverley and Holderness, I noted what he said and was reminded of aspects of our discussions about the adequacy or inadequacy of clause 4, which sets out the absolute low income target within the Bill, when several hon. Members commented that they did not think that that was particularly demanding or even especially useful. My hon. Friend might be on to something there, which suggests that the minimum income standard route could be an alternative for examining that matter.
The hon. Member for Northavon mentioned several European countries with a similar methodology. I picked up in the course of my reading that a minimum income standards approach is used in America. It is based on the cost of a basic but nutritious diet, and then there are dozens of different poverty lines for different types of household, and they are updated each year to take account of general price inflation.
Groups that dislike that way of looking at povertyI believe that the IFS has at times been among themhave said that that would lead to too small a group being classified as being in poverty, and that might be a reasonable objection. However, it is interesting to note that, despite the use in the United States of minimum income standards-type poverty definitions, the official US poverty rate has fallen by less than 3 per cent. in 40 years, which would tend to suggest that people do not get left behind as economic growth happens, because the figures are updated according to what it costs to feed a family. The standards actually include more than food.
This has been an important and interesting debate. My hon. Friend the Member for Beverley and Holderness said that new clause 4 was a probing amendment. I shall listen with interest to what the Government say about it, but he could well be on to something, and the new clause might give us slightly more useful data than clause 4 would.

Helen Goodman: The Bill makes a clear and robust commitment to eradicating child poverty. It is clear in clause 8(5), which covers the strategy, that financial support is an important building block of an effective child poverty strategy. We will consider all potential methods of achieving our child poverty targets when we develop our strategies, including assessing the role of support for those who cannot work. I fully appreciate the good intention behind the new clauses, but we do not believe that they are necessary in practice. It could actually be unhelpful to include them in the Bill, for reasons that I shall set out.
We are committed to ensuring that the tax and benefits system provides adequate financial support. Families in the poorest one fifth of the population are £4,750 a year better off

Sitting suspended for a Division in the House.

On resuming

Helen Goodman: As I was saying, we are committed to ensuring that the tax and benefits system provides adequate financial support. Families in the poorest one fifth of the population are £4,750 per year better off as a result of personal tax and benefit changes since 1997. I would like to draw hon. Members attention to some facts and, picking up on a point made by the hon. Member for Northavon, show that the tax and benefits scene and the way that different families are treated in the situation in which they find themselves, are both complex and not straightforward issues.

Steve Webb: I very much welcome the commitment that the Minister just gave to the adequacy of benefit levels. Can she clarify whether, when the benefit rate for, say, an under-25 single person is set at £50.95 a week, that is deemed to be adequate, based on what an under-25 needs to spend money on? Is it set with reference to anything real? Is there reference to what they spend on food, fuel, clothing and so on? Is the figure concrete, or is it just what it was last year plus a bit?

Helen Goodman: If the hon. Gentleman will give me a little time to develop my argument, he might understand our position.
Benefits are linked to various indices. For example, at present, jobseekers allowance is linked to the retail prices index, housing benefit is linked to the Rossi index, child benefit has gone up 25 per cent. in real terms since 1979, and child tax credit was increased by £75 above the earnings index in 2009. We have in statute various indices to which benefits are linked in order to achieve various policy objectives. Obviously, one of the key policy objectives since 1999 has been raising the standard of living for families with children.
Consequently, if hon. Members look across the whole period, they will see that we do not stick to the indices. We make subjective judgments to set increases over and beyond the statutory indexation provisions. That means that, for a lone parent with one child aged five, the real terms increase in the period from 1997 to 2009 has been 30 per cent. For a lone parent with two children, it has been 50 per cent. For a couple with two children aged five to nine, the percentage change in real terms has been 27 per cent.
Another factor that we need to take into account is passported benefits. Obviously, the calculations to which the hon. Member for Northavon refers do not take account of the value of passported benefits, such as free school meals. If we were going down his suggested route, we would need to take that into account, too. Finally, when looking at those benefit levels, we need to take account of the new benefits that we introduced to supplement peoples standard of living at particular times. For example, we introduced the health in pregnancy grant and the Sure Start maternity grant.
The situation is complex. I suspect that the hon. Gentleman tabled the new clause before research was done by the Library. He had anticipated that all the benefit levels were below the relative poverty threshold. He is smiling, so I know that I have hit the point. As the hon. Gentleman said, for a lone parent with one pre-school age child, the threshold is £205. The benefit is £235, so that family are above the threshold. As for the couple with two children, the benefit is £330, as is the relative poverty threshold, so that family is not below the poverty threshold.
I could talk about the additional support for families with disabilities, the implications of housing benefit and the differences between tax credits, but I hope that members of the Committee will accept our record, which is one of not only indexing benefits but, when opportunity allows, raising them and improving the relative position of such families. One of the crucial aspects of the Bill is that it must be based on a growth strategy for the economy. Once the economy is growing, it will, of course, be easier to be more generous with benefitssomething that will remain open to us.
New clause 2 would require the Government to pursue the method of guaranteeing that the level of out-of-work benefits would be sufficient to lift children out of poverty. However, placing that guarantee in the Bill would reduce the flexibility that it provides for forthcoming strategies. It would force a focus on a particular approach to tackling child poverty that might not be as effective as other options, but we are not sure that it would be a sustainable approach to tackling poverty. We all know that escaping poverty through work has wider beneficial impacts on families compared with escaping through financial support alone. Entering work has many social benefits. It will reduce stress in the family and provide role models for children. A major problem with the new clause is the impact on financial incentives to enter employment, and we need to consider that negative impact alongside the other perfectly sensible things to which the hon. Gentleman has referred.
We must also recognise that many aspects of the benefits system are designed to provide short-term support in response to changing circumstances, such as short-term unemployment rather than long-term sources of income. The new clause does not take account of that purpose of the benefit system and could have an unintended impact on its effectiveness. As drafted, the new clause requires the changes to be introduced on Royal Assent, and that is not achievable.
Guaranteeing that out-of-work income is sufficient to lift a family out of poverty would be technically difficult to deliver. The poverty line for a year can only be calculated after the year in question has ended and once the median income has been calculated. Therefore, the Government would not know exactly how much benefit would need to be paid to a particular group of households to raise their incomes above the current poverty line.
I shall now deal with new clause 4, even though the hon. Member for Beverley and Holderness, who tabled it, is not here. On 22 October, the Committee heard evidence on the role of minimum income standards in tackling child poverty. New clause 4 proposes that the Secretary of State should have regard to minimum income standards in carrying out his or her duties, and that he or she should commission research into the subject. The Government welcome the Joseph Rowntree Foundations research on minimum income standards, and we continue to follow its research with interest. However, although we recognise and appreciate the intention behind the amendment, we do not agree that the approach should be enshrined in law.
The Government have consulted extensively on the long-term measure of child poverty. Minimum income standards were ruled out because different research methods tend to make different assumptions and it is difficult to get one answer to the simple and single question: how much income is enough? Family circumstances obviously vary considerably. Even if it were possible to define income adequacy on a fully consistent basis, it would be difficult to generate a long-term robust time series, which is essential for measuring progress. In fact, the researchers explicitly say that their minimum income standard should not be treated as a poverty threshold, though they propose that it is relevant to the general discussion of poverty and living standards.
We have consulted extensively on the nature of the targets and there is widespread consensus and support that they accurately reflect the way to tackle poverty in the UK. Taken together, the four income targets in clauses 2 to 5 define a stretching goal. Achieving them will not only mean the lowest poverty rates since records began and in line with the best in Europe, but will tackle material deprivation and mean that the same families are not persistently poor. Although temporary periods of low income, such as that caused by a short spell of unemployment, can create difficulties, the most damaging effects of poverty are caused by long-term and recurrent spells of relative low income. The approach set out in the Billusing a combination of four targetsis therefore a crucial part of ensuring that poverty does not affect children's life chances over the long term.
Finally, there were also technical difficulties with new clause 4, with adhering to the minimum income standards. With the survey techniques we use to assess household income it is not feasible to ensure that no household falls below a certain income level. That is why other targets have been set at levels of 5 or 10 per cent. rather than zero.
New clause 4 also suggests that the Secretary of State should commission research on minimum income standards. Such research is important. However, as the latest research by the Joseph Rowntree Foundationpublished in 2008 and updated this summeris robust, it would not represent a particularly good use of Government resources to seek to replicate it.
In advising the Government on their strategy, the child poverty commission will be completely free to make a full exploration of the minimum income guarantee. The Government would be perfectly happy for it to do so when it is formulating its advice on the strategy to the Secretary of State. I therefore hope that the hon. Member for Northavon will accept what I have said on these matters, see that the Bill puts in place measures for achieving improvements in the incomes of our poorest families, and withdraw the new clause.

Steve Webb: The first half of the Ministers replyWe have put benefits up by more than inflationwas the answer to a different question. I do not dispute the statement, but that was not the point of either amendment. The point was, Are benefit rates set relative to something real? The fact that they are higher than they were last year, plus a bit, still does not make them relative to anything real.
The Minister said that the Government want flexibility, but the only flexibility that my new clause 2 prevents them from having is the flexibility to pay benefits below the poverty line. She made a serious point about the difference between short and long-term support. If the Government were to commit to those who are on long-term benefitsfor example, the children of the long-term sick might be guaranteed not to be living on poverty benefitsthat might represent progress. She seemed to make two conflicting comments. One was that there would not be minimum income standards because people would disagree on how to set them, and the other was that she did not want to commission research because the Joseph Rowntree Foundation has just published robust research. If we could not have statistics because people disagree on how to obtain them, we would not have the Bill because there are plenty of variations in the figures that we have. That is not a credible argument.
When we heard evidence, it was pointed out that a young woman under 25 is allocated £50.95 a week to live on, but evidence suggests that £43 a week is needed for food for a decent, healthy living standard. Fuel and other bills cannot be paid from the remaining £7-odd, so young women in that age group who are on benefit are, by definition, eating less than is healthy for them. If they then become pregnant, they will at that time have been eating unhealthily.
Budget standards and minimum income standards would enable us to consider what such young women need for a decent standard of living, and to make that the benchmark. Fiscal considerations would determine whether we hit the benchmark, but not knowing what the benchmark is is unacceptable and inexcusable. I know that the hon. Member for Beverley and Holderness will not press his new clause, and that is a shame because it would add something to the Bill.
I accept that new clause 2 would immediately incur a lot of cost, and that there are difficulties when measures are introduced retrospectively, so I will not pursue it, but I hope that it has given Ministers and their officials food for thought. We cannot legislate on child poverty without thinking about benefit rates relative to the very thresholds that we are enshrining in legislation. If we have achieved even that in the debate, we have achieved something. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Ordered,
That certain written evidence already reported to the House be appended to the proceedings of the Committee.(Mr. Timms.)

Question proposed, That the Chairman do report the Bill, as amended, to the House.

Stephen Timms: May I say a few words of thanks on behalf of the Committee? We have all enjoyed serving under your chairmanship, Mr. Key, and that of Mr. Caton, your co-Chairman. I thank the Clerks for the way in which we have been kept efficiently at our task. We have had a fascinating series of discussions, and we have had a thorough debate on the Bills content. The support from members of the Committee of all parties for tackling child poverty is encouraging.
My hon. Friends have followed these matters closely and, in some cases, for a long time. I am grateful for their help, support and arguments. The hon. Member for Northavon has great expertise in the matter, which he deployed to good effect. We have benefited from the contributions of the hon. Members for South-West Bedfordshire and for South-West Hertfordshire, and other Opposition Members.
I was particularly pleased to establish common cause with the hon. Member for Beverley and Holderness on antipathy to split infinitives, if not much else. I thank my hon. Friend the Under-Secretary for Work and Pensions, who has helped to steer her first Bill as Minister through the Committee with such aplomb and gusto.
I also thank our officials, the Hansard writers, the Doorkeepers, the police officers and all who have fulfilled their duties so ably.

David Gauke: Further to those remarks, may I add my thanks to you, Mr. Key, and to Mr. Caton for chairing our proceedings so efficiently, effectively and good naturedly? May I also add my thanks to the Clerks, the attendants, the police, and the Hansard writers? I also thank the witnesses whom we heard during our first four sittings. Their evidence guided us, and was helpful to the Committee.
I thank the Ministers. The Financial Secretary is absolutely right to say that the Committee has been conducted in a good natured way. I thank him for the steadiness and calm that he brings to such matters, and I thank the Under-Secretary of State for Work and Pensions, who brought her own qualities, which the Committee has thoroughly enjoyed in the past few days, to our proceedings.
I thank the hon. Member for Northavon. It appears that his whole career was but preparation for the last few days. To see someone so in their element was a joy. However, I sympathise because this is probably as good as it gets for him.
I thank the Whips, my hon. Friend the Member for Billericay and the hon. Member for Leeds, East, for keeping things running smoothly and for some Divisions where there was a bit of excitement. The clever use of the conventions of the House by the hon. Member for Leeds, East to ensure that the Bill was unamended never ceased to impress.
I should particularly like to thank my hon. Friend the Member for South-West Bedfordshire for his sterling work. He brings an almost passionate expertise to this issue and is highly regarded by all those who are focused on it.
In comparison with the Finance Bills, of which I have more experience, Back Benchers from all parties have made considerable contributions. I thank my hon. Friend the Member for Henley, whose expertise on local government matters was valuable, and my hon. Friend the Member for Beverley and Holderness, who enlivened the Committee with his forthright viewshe was never knowingly understatedand added a great deal to our Committee.

Steve Webb: I associate myself with the remarks that have already been made. My hon. Friend the Member for Edinburgh, West graciously allowed me to hog the amendments that we moved. He was champing at the bit and I am grateful to him for allowing me to let rip.
If I were to table an amendment on Report to delete paragraph 19(1) of schedule 1the disqualification of hon. Members of this House from the chairmanship of the child poverty commissionI hope that that would be approved without Division, just for fun, really.
I associate myself with the comment made about the positive nature of this Committee. During the Committee stage of my first Bill in this House in 1997, Government Back Benchers were literally doing their Christmas cards. This has been quite different. All the Labour Back Benchers are knowledgeable, have a track record and a lot to contribute. I appreciate their tabling their own amendments and making their own arguments, enriching the quality of our debate.
We have given the Bill a good going over. I am only sad that we cannot get straight on with Report and that we have a few weeks to wait. I thank you for your chairmanship, Mr. Key, and look forward to serving under you again.

Question put and agreed to.

Bill, as amended, accordingly to be reported.

Committee rose.